2018: A push toward affordable housing
By Al Ricci
Effective Jan. 1, a $75 “recording tax” fee will be imposed at the time of recording for every real estate instrument, paper, or notice that is required, and permitted, to be recorded. This combined fee shall not exceed $225 per transaction. The funds generated by this fee are dedicated to providing affordable owner-occupied workforce housing. Overall, 70 percent of the revenues will go to local governments for housing, and 30 percent to be distributed by the Department of Housing and Community Development and the California housing finance agency. The good news is that the fee shall not be imposed on any transfer to an owner-occupant. Specifically, the law exempts transfers when the documenting transfer tax must be paid in connection with a transfer tax of real property, that is, a residential dwelling transferred to an owner occupier.
After the state escheated with the money from the housing-set-aside redevelopment funds, the local governments have little-to-no means to provide low-moderate income housing. So, the state is now creating this tax to promote and subsidize affordable housing.
There were 15 housing bills signed into law for 2018. These laws are intended to streamline new housing developments, enforce the Housing Accountability Act, and provide a new permanent source of funding for affordable housing projects. This includes AB-2299, which is an extension to the Accessory Dwelling Unit permit process, which makes it
easier, by state law, to build an accessory dwelling unit. The legislation encourages these types of new rental units by relaxing parking and setback requirements. It allows “tandem parking” and prohibits cities from disallowing parking in “setback areas.”
The goal is to provide a “roof over the head” of anyone who is part of the workforce and would otherwise be forced to leave the state in order to find affordable housing, or achieve the American dream of home ownership.
If you are thinking about changing vesting on your home, creating a trust, adding a family member to your deed, do it before the end of the year to avoid this new “tax.”